Thursday, December 30, 2021

Will Zoomers even bother to wake up in the morning to go to work?


Preparing to launch a new cryptocurrency programme targeted at conservative folks in my generation has raised some questions that probably can't be answered right now even with all the information we have. 

What you can be shown above is a simple experiment I'm doing with my spare cash. Beyond the usual yield farming strategies, I've also used some kopi money ($3,000+) to farm into really dubious projects - just for the lolz. 

As you can see, some projects under the Nexus Protocol can yield over 100%+ a year. 

BTW, I don't recommend this to readers because I started losing money immediately after pulling this stunt - it's still a big question mark as to whether the yields farm can cover the losses over the next few months. I also could not, for the life of me, understand the white paper of this project.  

The rest of my yielding farming strategies using stablecoins, however, are doing fine and I was able to build a fairly steady portfolio that yields about 14% a year. And while I actually do not think this is sustainable over the long term, if stable strategies above 14% can be shown to work in the cryptocurrency world, it raises some issues for policymakers and philosophers to think about.

Imagine a world where you can yield 14%-20% without experiencing market risk. No matter what you do, be it internal marketing campaigns or launching of new products in a company, your opportunity cost would be making 14%-20% in the cryptocurrency world. Suppose you are an IT manager that wants to pitch some service management software to be deployed to make your department more efficient. Your CFO may argue that in order to justify your project you need a hurdle rate IRR of 20%,  because, otherwise, it's better to convert the funds into crypto to yield farm instead.

This will also have ramifications in your personal life - why do you want to take a risk to start a business when a stablecoin can be farmed at 20%? Also, anyone working and saving up $120,000 can generate $2000 a month at 20% yield year. Why would anyone with $120,000 liquid cash wake up to answer to the boss at work? 

Of course, in real life, no one will really believe that 20% yield are sustainable, there may be some kind of de-pegging in the horizon, farming yields may drop, or inflation will surge. 

But I think this will not stop some Zoomers from giving this high-yielding for of FIRE a try. This shuld be a thing that should bother employers because we are in the midst of a Great Resignation. 

For folks my generation, there's nothing stopping us from getting some $200-$300 Amazon goods from yield farming strategies every month, if we get depegged, we should just move on in life.  We may enjoy better odds than playing 4D or Toto.

Anyway, all my crypto is bought using dividends from my equity portfolio. 

Monday, December 27, 2021

How trying to be Financially Independent can leave you Forever Alone

One useful mental model to have for readers of the blog is the OCEAN personality model, where we can describe a person's personality by 5 axes. This is the Rolls Royce of personality models and psychologists are able to map each factor into an actual biological brain function:

  • O - Openness to New Experiences measures how much you prefer novelty over the familiar
  • C - Conscientiousness measures how neat, orderly and dependable you are.
  • E - Extroversion measures how outgoing and sociable you are.
  • A - Agreeableness measures how trusting you are and how much you get along with others.
  • N - Neuroticism measures how vulnerable you are when faced with emotional disturbances.

Once you are armed with the OCEAN personality model, you can begin to enjoy reading articles on psychology and a friend forwarded me this gem on an article that explains why some folks are single (link)

Single folks fall into two categories :

a) BBFA - Bui Bui Forever Alone

The first category is the much-celebrated personality that you can find in Hardwarezone's EDMW forums. While it is used to describe the kind of keyboard warriors who hide behind their anonymity, I think the real insight is that these folks are highly introverted. 

A large part of the single population is like this because they are highly introverted and find crowds and interacting with other people quite draining. And this is what feedback I receive from folks who go SDN gatherings and tinder dates. Some dates are really unpleasant because the other party is too quiet. 

The reason I find a link between trying for Financial Independence (FI) and being Forever Alone (FA) is that the FI movement has strong participation from Introverts with Reddit surveys claiming a majority of FIRErs being INTJ.  

Does this explain why some objectively rich folks remain single? I think there's a valid reason to tie FI and FA together if this were the case. Nevertheless, the article suggests that singlehood is not a permanent affair and folks do eventually find someone.

It's not difficult to detect an introvert. Invite them to a party and watch it slowly drain them of personal energy. Then, if they are not hot enough for you, you can send them back and possibly never date them again.

b) KKKFA - Kah Kwee Kwee Forever Alone

But that's not the most important insight. Apparently, BBFA only covers a portion of singles. 

It was found that a high openness to new experiences is also a precursor to singlehood, which is why I coined a new KKKFA moniker. I am very excited about this insight because I always felt that I had a higher openness to new experiences compared to peers my age. 

The logic is extremely sound. Folks who like variety in their lives find it hard to settle down with one person, which explains why Wang Lee Hom wanted to avoid marriage in the first place. 

I actually believe that some men remain single because they are attracted to women with high openness to new experiences and they can't overcome the singlehood hurdle. I told some of my friends that in targetting some attractive women,  they are actually not competing against other men - they are competing against singlehood which comes with travel and fewer personal obligations.  

One way of figuring out whether you are doomed to waste your time on someone with high openness to new experiences is to examine the books, music and artefacts in their homes. Folks with a high O-score have a varied taste in music and books. You are highly likely to find World Music CDs, books from around the world with an eclectic mix of genres and artefacts from different continents.

It would be interesting for single readers to ask themselves whether they are BBFA or KKKFA. 

For the rest, you should acquaint yourself with this model because I'll be doing some heavy research on personality types and investment performance for the Dr Wealth blog pretty soon.

Saturday, December 25, 2021

Merry Christmas, Happy New Year and Happy Holidays !


I'm 47 years old this year and I just reviewed what I wrote on Christmas Day last year. I think for most of us, 2021 is a big disappointment, my revenues dropped like a ton of bricks which is sort of expected, but so far investment gains largely negated the loss of sales. What is frustrating is that despite vaccines, travel has not resumed, and I can't really bring my mum to visit relatives in Malaysia this year.

I don't have a lot of wishes this year. I should be launching a new programme in 2022 and then it's basically hoping for the best that we recover from the pandemic and travel resumes. I'm cautiously optimistic that once Paxlovid gets deployed in Singapore, we will see the end of the pandemic as hospitalization rates drop by 88%. The truth of the matter is that I have a lot hinged on the COVID-19 pill and Singapore's recovery, investments inclusive. 

iFast has also released the Christmas episode of My 2 Cents. You can access the link here :

This is the most depressing episode I made. The background story is that I had contact with a COVID-19 patient, so even though I tested negative for ART, the policy was that I can't be physically present in the shoot. iFast staff was pretty fast-acting and we held an emergency meeting to somehow allow me to be present without actually being present. 

The result is that... I cannot have my cake and eat it too. 

I'm getting into a period of my life where I need to play up caution. I'm also a Tiger and starting February 1st, I will be entering a period of Fan Tai Shui where a lot of challenges will be thrown at me. Even right now, my business has to survive because I have, more or less, internalised the idea that I can't sit still and just ride into the sunset after FIRE. 


Thursday, December 23, 2021

The Leisure article - Happy Holidays !

I'm two days away from my birthday, so it's time to slow down and talk about hobbies and interests. I have not been doing very much this holiday season even though I see a lot of folks going on staycations and travels via VTL. Also, my family has decided to stay put. 

Personally, I'm betting that things will get much better once the Pfizer pill gets deployed in Singapore. We basically have a way of not overtaxing our medical facilities and the opening will accelerate faster by then. Even now, we're seeing better numbers every day although Omicron may start to hit us hard in January 2022. 

I only have two things to share with the readers as we come to a close this year.

a) Session Zero - A D&D-themed theatre production

Generally speaking, I will not support the local Arts scene because I don't want my money to flow to woke people, but I really have to make an exception when a local production channels my favourite hobby Dungeons & Dragons. My fear is that the reception falls flat and someone loses money - then no one will support productions with D&D references in the future. 

For my first attempt to watch a play, I made sure that my party had the skills to navigate the scene, so I was accompanied by not one but two English Literature teachers, and it really helped me with appreciating the experience. The best bits I picked up is the team behind the production and how the professor thinks when improving the script. I was obviously more interested in whether the play can break even financially and the teachers explained to me that selling out is often not enough and rents still need to be paid. We estimated one full house session to bring in about 20 x $35 or $700 and rental of the premises may be several hundred a day. And there are many mouths to feed.

Still, I don't need an expert to tell me that the acting was way better than Mediacorp and the two actors did a fantastic job. Sadly the fairly brutal and real story of a disintegrating marriage was somewhat wasted on someone like me who prefer stories set in the MCU replete with pop culture references. The script really does hit really close to home and as a D&D fanboy, I felt it hit the number of requisite RPG references. 

Maybe it's just me, but 75% of the fun is talking about the event after the fact in the ice-cream parlour. It would have made a nice dating event and I was somewhat dismayed at the lack of, in woke-speak, (cis-het) couples attending the event. I'm trying my hand currently at match-making some of my friends and I must say that plays and theatre is a good choice of venue.   

Now I know that Gen-Z is gently castrating themselves our population is doomed!

b) Hikes with random friends

While I remain quite ambivalent about the Arts, I genuinely enjoyed the hikes I had for the past few weeks. It started out with ex-colleagues inviting me to meet up at 745am to climb Bukit Timah hill. It was really tiring at first, but it led to better sleep at night. 

I took some pictures of my hikes and, eventually, some friends who were on leave started to ask whether I am free to hike with them. I think the guy who FIREs is like a friend of last resort. These hikes were so random but I managed to get an invite every week now. I started with 12k steps and now I'm doing about 25k without really feeling tired. My last hike did not last too long, but I was able to swim the day after and there seems to be no need for a recovery period the next day. 

The challenge for me now is to assemble a team to walk the entire Rail Corridor from Hillview to Tanjong Pagar. Currently, I can only do half on one go. But this is not such a big deal with folks inviting me to their hikes and I let them determine the route.

I will just focus on making the dialogue as interesting as possible. 

In two days time, I'm going to be 47. There will come a time when my fluid intelligence drops, I lose my open-mindedness to new experiences, and I will become a cranky old man. I think the struggle is to continue to be relevant and fun. Fortunately, exposure to law school where I get to work with folks half my age has helped. 

Here's the thing that is interesting: For now, all the folks who invited me to walk with them are younger than me, some more than a decade younger. 

Maybe I'm using them to stay young, but hanging with Gen X really does not appeal to me ever since I graduated from SMU. Even though I cracked the finance puzzle, I'm not really interested in mortgage payments, cars to buy, Manchester United, or the real estate market. With younger folks, I can talk about cryptocurrency, robo-advisors, Wang Lee Hom's sex life, Fei Yuqing rumoured sado-masochism, crafting potions on Skyrim and Roblox. 

I might be interested in talking to Gen X about my kids, but that may actually offend my peers because I fully intend to experiment with creating trust-fund kids and my latest crazy idea is called Polytechnic Insurance. I think I'm the opposite of a good parent my peers aspire to be. 

To find out more, you need to stay tuned to future articles. 


Monday, December 20, 2021

[iFast TV] Unconventional Financial Tips You Don't Hear About Everyday


The second part of my video under My Two Cents is out, you can follow this link to access it :

I let the video speak for itself. I'm particularly proud of Kopi Tilok arbitrage.

As we had to brainstorm more unconventional ideas compared to how much we actually deploy, not all of my ideas made the cut, so I will list out the rejected ideas on this blog :

a) Don't believe in asset decumulation

In financial planning circles, a lot of care is taken to consider decumulation which is the process an older person begins to spend down his asset class before he dies. To dividends investors with a portfolio of decent size above $3M who also have children, this is totally optional.

It is entirely possible to limit spending to investment income and pass along capital to your children after you pass away. Wealthy people do not believe in decumulation anyway as spending all that capital may even inflict harm on your well-being.

How many bowls of sharks fin can a person eat anyway?

This idea was not included in the video probably because most viewers are unaware of what decumulation even is.

b) Don't believe in consumption smoothing

Another idea in financial planning circles is that ideally, a person should smoothen his consumption over time. This means being liable for some debt to increase their spending when they are younger and have lower pay and to be able to save more when they receive a higher salary when they are older.

This is always puzzling to me as the key is to be able to save more and work harder when younger to generate compound interest and then build up your savings to live on investments as early as they can. It is not understood why consumption is so important in life as we’re likely trying to buy something to impress someone we don’t even like.

This idea was not included in the video probably because most viewers are unaware of what consumption smoothing is. In advanced societies where fee advice is the norm, consumers are taught this term from financial advisors.

In Singapore, commissioned FAs are too busy taking Instagram photos with their European cars and selling ILPs.

Friday, December 17, 2021

#1 : Ray Dalio's latest book is simply... WOW !


Some books are so mind-blowing and powerful that they should quickly be elevated to the level of an investment classic. Ray Dalio's Principles for Dealing with the Changing World Order is so important, that maybe it should be taught in our secondary school history classes. 

This book is important because of an investor's need to cut through the proliferation of books on intellectual masturbation written by academics and political scientists. We know that Ray Dalio has a lot of skin in the game because if he misreads the prospects of the countries he invests in, a lot of his money can be lost.  He also has this wonderful talent of turning really subjective measures like Character/Civility/Determination of a country into a quantitative scoring system. Doing this may give a political science professor a brain aneurysm, but it lends a certain amount of credibility to this analysis. The final reason why you should read this is that he's probably the only western author that is even-handed about China. He has long ties with the Chinese leadership and you will find his writing much less critical than, say, the run of the mill articles on The Economist. 

The part that should be taught in local history classes is that Ray's idea is that there are six phases of a dynastic cycle that repeats itself over and over again. Armed with this model, history students can attempt to figure out which phase a society is in, and they can also predict what is likely to happen next. 

This is light years better than a regurgitation of facts and dates. 

I can summarise the six stages are as follows :

Stage 1 - After a period of chaos, a new order begins and a new leadership consolidates their power. Eg. Singapore on its day of Independence from Malaysia

Stage 2 - The society begins to figure out how to do resource allocation and government bureaucracies are built and refined. Eg. Singapore in the 1970s.

Stage 3 - The society experiences a golden age of peace and prosperity. Eg. Singapore from 1980s till today. 

Stage 4 - The society experiences great excesses in spending and debt and income inequality rises. Singapore has not reached this stage, but the US definitely is at the tail end of this with large debt and income inequality. China may be already in Stage 4. Singapore is ramping up property taxes right now and raising ABSD in a bid to delay entering stage 4. 

Stage 5 - Society experiences bad financial conditions and intense conflict. The US is expected to head to this stage next. It takes one bad recession/event for folks to realise that the wealthy are protected from a lot of disasters compared to the poor. This can trigger class warfare. Polarisation between the political left and right has already started.

Stage 6 - Society collapses from civil war and revolution. This was what happened when the Chinese Communists took over and when the Bolsheviks in Russia toppled their monarchy.   

I think right now, societies do not have a way to extend Stage 3 because some kind of wealth taxes may need to be enacted at the global level to prevent the flight of capital out of any individual country to improve the social mobility of blue-collar workers and the working classes all across the world.

Like a bottle of good wine, this book really pairs well with Marko Papic's book on Geopolitical Alpha. You can read my article on that excellent book by following this link :

Anyway, I am not done with this classic piece of work, I will discuss other aspects of this book in future blog articles.

Saturday, December 11, 2021

[iFast TV] Should Young Adults Choose Money or Passion?

For the past few weeks, I have been collaborating with iFast TV on this series called My 2 Cents. You can watch the video by following this link

Some readers will be wondering about some details of my collaboration with iFast. I'm happy to share that I actually did everything without financial remuneration as I have the means of monetising these eyeballs through my course offerings. The upside is that there is a stronger degree of control and I get exposure to what media broadcast is like. Naturally, I ended up having a great deal of respect for actors and the logistics required to create even a short video like this. 

A lot of discussions I have of late is about choosing between Money or Passion which is actually a false dichotomy - you can choose both. But the reason why this remains a hot topic is that a lot of young people feel trapped in jobs that they pay and actually switching to job that they love would result in a serious pay cut.

In this video, I made two pertinent points that should be useful to the reader :

a) Understanding Job B matters

As a society we're too obsessed with Job A, a high-paying we take to pay the bills, and advance in society, that we often dislike, and can't wait to get out of. This can be a job as a Legal Senior associate while counting the days to a junior partnership. 

But equally important is the idea of Job B -  a job we enjoy, we can sustain but may not pay as well. 

My rationale is for everyone to know what is their Job B so that they can decide how long they can sustain Job A before they give it up for a better life. This knowledge is valuable because Job B with some passive income can be the equivalent of Job A. 

So my stand is to meditate on what Job B is and how much it pays, I tell lawyers that for them it's generally becoming a GP tutor in a private tuition agency. 

b) Three S's in picking professions. 

If you want to survive this new world where tech obsolesces becomes a way of life, you need to be guided by the three S's. A job has to be Surprising - no SOP can contain instructions on how you do your task because it can be automated. The job should be Scarce, not everyone can do the job. One litmus test is to see whether there is a licensing regime to perform the task or there is a guild to protect the interest of these professional groups. Finally, the job should be Social - a strong element of personal interaction should exist because it is harder to outsource actual human connections.

I will summarise my points in later videos, but I hope you will watch them to find out what my colleagues have to say about the matter as well 

Tuesday, December 07, 2021

Early Retirement Masterclass Community Event Q42021 - ERM goes Crypto !

We will be conducting a community event for my Early Retirement Masterclass alumni on 16th December 2021 7.30pm. 

In this event, I will be describing my nascent efforts to invest in cryptocurrency in a manner that is more consistent for ERM alumni. My students have already been invited to send me some questions so the slides will address them over the next few days.

Members of the public are invited to attend this event. At the moment, I'm not positioning myself as an expert, I see myself as more like a fellow explorer so expect the material to be somewhat basic for now.  

The main question I want to answer is the question of :

"Whether Skeptics and Conservative investors have room in their portfolios for cryptocurrencies?".

Items of discussion include :

  • Some cryptocurrency basics.
  • Why conservative investors should take a closer look at stable-coins.
  • How a beginning crypto investor's environment and tools can look like.
  • Two interesting ideas investment ideas for Early Retirement.
  • A quick tour of the Metaverse and what's trending in this space.
In my investigation, I have discovered more questions than easy answers so members of the public will be encouraged to participate in some online surveys, this ensures that everyone will be able to leave with something useful at the end of the session.

I will conduct the usual portfolio updates for the student-built portfolios at the end of the presentation.

Please register by following this link:

Saturday, December 04, 2021

Using a Finance Blog to hone your critical thinking skills

The Life-Changing Science of Detecting Bullshit by John Petrocelli is a gem of a book that really does not hesitate to name names and one of the big joys of reading this book is to look at how much bullshit Americans have to live with. Some big names along with concrete examples of their bullshitting include Dr. Mehmet Oz and Deepak Chopra. Naturally, the situation in Singapore is not much better and I find that, after banks can link up CDP to create a 360-degree view of your personal finances, folks like my mum are starting to get more calls inquiring about her investments.    

One useful way of benefitting from this book is to use the appendix of the book that has a comprehensive list of fallacies and try to identify them on finance blog articles to sharpen your own thinking. 

So what I'm going to do is to simply take the latest Money Maverick article and then run through the list of logical fallacies to see where can find some areas where a reader can improve his ability to think critically. Money Maverick was a controversial blog owned by Financial Advisor Luke Ho, but it has since changed hands.

You can go through this exercise yourself by using this link.  

See if you agree with my analysis.

a) Anecdotal Fallacy

An anecdotal fallacy occurs when someone uses anecdotal evidence or vivid examples in his reasoning.

You can find this performance table in this article : 

The thing is that we will see a lot of these results demonstrations on the web, but because Seth can only show off his own portfolio, this is just one data point and does not reflect all of a FA's customers. As it seems to cover just Seth's performance to me, this may well be anecdotal.  

Similarly, we need to be very careful when FAs display the results of their customers. We should not settle if they only get to cherry-pick their top performers. 

b) Hot Hand Fallacy

This is a fallacy where we believe that good things will occur directly following favorable/desirable outcomes. 

From that same snippet, you can find a fairly good return of 36.74%. The Sharpe ratio is off the charts are over 3, but the record only covers one year of performance. To understand what a Sharpe ratio of 3 means, it is actually very sensational, a quant who gets about 0.8 over 10 years is a fairly good investor. This is clearly a one-year hot-hand and the question is whether a Sharpe ratio of 3 can be maintained over time. 

In the investing universe, a one-year record is hardly something to crow about especially when China and US Tech stocks have well but not having a good time lately. 

The problem with asking for a longer track record is that we won't even know who the real owner of the Money Maverick blog is going to be in one or two years' time.

c) False analogy 

When you employ a false analogy, you are using perceived similarities to infer additional similarities that have yet to be observed.

The third fallacy is kinda hard to find given that, frankly, the quality of this article is really poor and the author rambles as he goes on. You need to suffer through the article after which you can scroll down to the section on "Penny-wise, Pound Foolish will not work"

Seth first talks about running his business and why it's not wise to skimp on rewarding good employees. He then tries to take a logical leap to say that, similarly, it is dumb to spend hours looking for the best-fixed deposit for just an extra $75.

If you put on your thinking hat for the moment, you will realize that employee retention and savings deposits are not the same things.

Employees have varying levels of productivity and putting in more rewards can pay off immediately if you consider the cost of employee retention and how difficult it is to get good help in a business. It is also expensive to figure out who a good employee is - you've probably paid sunk costs to do that. You are rewarding them to minimize waste as well. So this kind of good money should be spent.  

A good fixed deposit pays out a higher amount and is an objective measure. There is no reason to take a more expensive option when a cheaper one exists. Also, savings accumulate and compound over time and the final outcome can be quite consequential. How can putting more time to find a better product be considered pound-foolish? 

Readers need to be careful. 

This argument is common in the finance industry that is struggling with high expense ratios and is now faced with cheaper options like robo-advisors and ETFs. The logical defence is to just say that folks trying to cut costs are penny-wise pound foolish. 

In summary, the Singapore financial blogosphere is a great place to practice your critical thinking skills and there are quite a number of blogs that facilitate this kind of practice. Of course, I have only used the book on one sample blog, you are free to even use these tools on any piece of writing including my own. 

I'm not infallible and we can probably learn a thing or two from the exercise. 

Sunday, November 28, 2021

How's your paper thosai private degree doing ?


This is a good time to revisit one of my harshest critiques of private degrees in Singapore. You can read this old classic here

The article came out in 2015 and was so harsh, tuition agency blogs wanted to reproduce it (probably to scare parents). Over the years, I think there have been some positive changes that warrant a revisit of the contents of this classic. 

First, I think we should think about what has not changed. The gap between a private degree and a local degree continues to be wide - as high as 33% in some cases. In fact, the situation has become much worse.

The rule of thumb we should apply is that a diploma will get you a salary of around $2,000. Upgrading a private degree will add $400 every month, but this is a far cry from a local degree that pays around $3,600. 

To make everything sound politically correct, some bloggers have been trying to appease readers by suggesting that the pay gap between private degree holders and local degree holders is discrimination which I have always argued to be ridiculous because SME bosses would love nothing more than paying 33% less for good headcount. 

Then why do local degree holders not just command a 33% higher pay but still enjoy a higher employment rate?

Maybe some readers will be butthurt, but in Terence Ho's book Refreshing the Singapore System, on page 224, he actually suggests that it is actually the $400 private degree premium above a diploma that is illusory because these polytechnic graduates have been trying to take generic management degrees that add very little value to their polytechnic diplomas. 

The final outcome is like eating a paper thosai - gives a nice feeling but hardly satiate your hunger. The question is whether we should even allow Singaporeans to waste years of their youth over a signalling exercise that does not signal very much after fees have been paid and lives wasted.

But I have good news. Private degree paper thosais may become an artefact of the past.

SUTD and Ecole 42 is setting up a degree program that has no instructors. This is important because there are no A-levels exams to take and no diplomas to complete. There is one online test, and then students will be whittled down by a one month programme that's like being thrown into a swimming pool and those who sink will be let go. 

For folks with real talent and who claim to have a bad start in life, this is a life-saver, allowing someone to get the hottest coding skills with no tuition fee. I don't expect 42 graduates to be as proficient as the CS Master Race of NUS who are the smartest in their generation, but it should produce a kind of scrappy autodidact who can possibly cope much better with industry changes, rejection and failure. It's also good that we can tell those overworked academics "You don't be CB !", some folks can graduate even without your guidance, at least a small portion of them can actually support our startup ecosystem. 

I think the 42 system is the real solution to the private degree problem. 

It's probably easier to start with a software engineering program instructor-free, but I think once it works, we should really be reforming humanities education along the same lines. The liberal arts should be a system of self-inquiry and we can prevent left-leaning academics from polluting our pool of humanities graduates. And we should come up with an MBA that is done 42-style as well. 

I will be closer to my 50s when 42 launches, and I'm feeling the effects of my loss of crystallised intelligence, it's taken me ages to stake my UST for 19.5% returns even though I ought to do this months ago. Financial independence has also sapped my motivation. 

But 42 is an education revolution that I really must be part of if only they would take me in.

I'll try out the online test, even though I may not be accepted. I'm up against folks who are fresh from A-levels and poly diploma programs, not to mention guys will full-fledged degrees who want to pick up coding.

If I'm lucky to get through, I'll see you guys at the Piscine.

Small chance there may be a space for a fourth-degree after all!

Friday, November 26, 2021

Free food, so must write something


This week investment writers have been invited to a session with Keppel Pacific Oak REIT to have a discussion on their latest results. I don't want to steal the thunder away from writers who might discuss the details, I will just share some points that were not discussed that day:

  • I have a decent amount of Keppel Pacific Oak and this is still one of my more profitable holdings as I bought a position when there was uncertainty over taxation rules of US REITS listed in Singapore.
  • Keppel Pacific Oak continues to be shortlisted in my factor models, but my students have decided not to pick it up in the last round early this month.
  • I actually disagreed with my student's analysis after this pleasant luncheon and consequently supported the counter when I sent my research to iFast for clients of their Introducer service. If anything, it will boost the yield of the portfolio substantially. 
One point discussed quite fervently was the food delivered to us for the talk. I had a fairly large portion of Nasi Lemak that not only had a drumstick but also a sausage. I found the meal disappointing as the sambal was so-so, the achar too tart, and ikan bilis a little too soggy after delivery. I had an opportunity to swap it for the beef bourguinon but was too late for my email but it seems folks who ordered the beef were not too impressed with it. 

Another interesting point of discussion is US Politics. 

When I meet the CEO of a US REIT, everything is already in their latest quarterly results, so I prefer to talk about generic US politics and I find a discussion with David Snyder really enlightening. 

( I do the same when I meet Europeans who run the REITs I own, enquiring about fertility rates in Poland and how popular right-winged parties are in Eastern Europe. )

From my discussions with business people from the US, they always give me the impression that they lean Republican. The first time I had a luncheon with KepPacOak, I asked them about the odds of Elizabeth Warren becoming US President and they told me that no way in hell it was going to happen so it allayed my fears. 

This time around, I asked them whether the exodus of tech talent into Republican states will swing the states towards the Democrats. 

Shockingly the answer is yes. I was told that tech workers actually succeeded in "defunding the police" in blue dominant counties in Texas even though it is largely a Republican stronghold.

You can imagine the incredulity of the businessmen in Republican states, angry Americans are fleeing California because of high taxes and once they get to their destination, they are bringing their progressive values to end the friendly regimes of their adopted new homes!

Anyway, I hope to get more luncheons in the future, I don't think I need to speak any more about the REIT given that my personal ownership speaks for itself. 

If anything, I will order beef anytime and avoid the default option in future.

Wednesday, November 24, 2021

Will Goh Keng Swee buy Cryptocurrencies for Singapore ?


I thought that after doing up my article on investing like GIC (link), this blog should have a discussion on more advanced topics that cannot be answered even with access to advanced data, so it falls to my blog readers to speculate on possible answers.

Goh Keng Swee's contribution to Singapore as a founding father is uniquely consequential. He made decisions that were counter-intuitive for its time such as employing exchange rate controls to prevent inflation and keeping the nation competitive instead of managing interest rates as central banks in other countries. He was one of the earliest politicians to recognize that investing in equities can lead to higher returns. He was also very much of a "buccaneer", buying 100 tons of gold at $40 an ounce through a secretive private deal in 1968. 

So the question I have for everyone is: Will Goh Keng Swee buy Cryptocurrencies for Singapore?

Imagine if Goh Keng Swee is still around and in his prime. He has powers of influence over GIC, Temasek, and MAS. 

Would he include cryptocurrency in Singapore's asset allocation?

The answer may need to be answered in multiple parts :

a) Should Singapore include cryptocurrency in short-term foreign reserves under MAS?

MAS tries to keep the Singapore dollar within two boundaries. If SGD becomes too strong, MAS will sell SGD for more foreign currencies. If SGD becomes too weak, we will buy back SGD using our foreign reserves. This was we can either control inflation or make our exports more competitive. 

Will these reserves benefit from a small allocation to bitcoins? 

My knowledge is quite shallow. In my opinion, there is currently no need to do so because we don't do actual business in SGDBTC. If a major trading partner makes Bitcoin legal tender, this cannot be discounted. 

b) Should GIC's policy portfolio include cryptocurrency?   

To meet GIC's long-term objectives, a team will determine what asset classes it can deal in. GIC was an early adopter of private equity so I don't see what impediments there will be to prevent cryptocurrency to be added to the mix. I would expect that if GIC were to do so, positions would be very small and diversified across many other cryptocurrencies. 

There will be a lot of impediments to making this a reality. Financial experts need to contend with new forms of risk ( like smart contract risk or oracles getting manipulated by hackers ).

One area that possibly needs to be addressed is volatility drag. The calculation for Geometric mean returns is not just the arithmetic mean returns. We have to deduct half the variance from average returns to get actual geometric mean returns.

GBTC returns (on Portfolio Visualizer) over the past 3 years are an annualized 66.39% with a standard deviation of 82.21%. The actual geometric return you will experience over time is 0.6639 - (0.8221^2) / 2 or 32.6%. 

It's still not too bad, but not as hyped up as many investors make it out to be.   

I suspect Goh Keng Swee will jump right in since GIC's time horizon is really long and no one will really know how much GIC really has. 

Anyway, readers are free to share given what you know about our history, what your answer would be.


Monday, November 22, 2021

Interesting encounters in my line of work...

One of the dilemmas about investment training is which target market you would like to pitch your product to. 

My approach is to build a course with actionable ideas and hands-on practice so some amount of maths and financial theory is unavoidable. To earn more, I can widen my reach and even increase my price if I water down my material - one approach is to make my material more motivational just like the property gurus, but I suspect I won't be able to sustain this as I would feel that the material belongs to someone else. Also, doing this would put me up against someone with a much bigger budget, who can really get in your face every time you visit Youtube. 

So with a more targeted niche audience, sometimes I get more interesting encounters that put an interesting spin on the materials I present to the public.

Last week, a fairly sophisticated attendee commented about how my presentation is a unique spin on M&M and almost flat-footed me during Q&A. Fortunately, I remembered that M&M stood for "Modigliani and Miller" who came up with their idea that the company value is unaffected by its dividend policy. This idea of dividends irrelevance arises from the idea that issuing a dividend reduces the firm value by the same amount.

I've got financial advisors trolling me in the past, almost all are intellectual light-weights, and this is the first time someone brought up M&M in my talk so I felt that a better answer from my session last week is in order.

While I do emphasise the employment of dividends for early retirement, the yield of my student portfolios are really nothing to crow about, it's about 5%, just a tad higher than ETFs. You can easily beat my 5% if you lump HPH Trust, Asia Pay TV Trust, United Hampshire REIT and Elite Commercial REIT in a portfolio and buy it in equal shares. In my program, we try to optimise the Sortino ratio, so we max out our risk-adjusted returns to make it friendlier for financial leverage, and it just happens that the high-dividends factor currently works in Singapore. 

I can't read the mind of the attendee, maybe as our models employ capital gains and dividends, maybe an argument can be spun that we align with M&M because we rank capital gains in the same category as dividends.

Now, that being said, after some thought, I can possibly put up an argument that dividends can be superior to capital gains in Singapore. If you sell your stock to free up cash for personal expenses, you will need to pay a brokerage fee. A dividends investor gets the dividend delivered into his bank account for free. This is not a strong argument in the world of equities, but it may be very consequential in the world of cryptocurrency when gas fees in the ETH blockchain are killing crypto bros. 

Anyway, I doubt that I managed to sell an actual ticket to the attendee, even though I'd admit that I do want more students of that calibre. I've trained CFA trainers, Phds and MAS regulators and someone like this can possibly teach me a thing or two about finance theory. Having more folks like this will also raise the level of my community which is getting closer to 600 in size.

But trainers like me are doomed to stay small and niche. 

I can imagine myself trolling some options guru in the Y2K-era and talking about Modigliani and Miller and at least one famous guy from that era is known to say to his critics," That's why you don't have the mindset to be a millionaire."

Anyway, don't lose any sleep if have no idea what I'm talking about in this article. 


Wednesday, November 17, 2021

The Financial Jackass of the Year


One of my favourite movie franchises was Jackass. In this movie, a bunch of clowns basically do crazy stunts and someone records the reaction of the crowds who get to witness it. Some of the stuff they do is tremendously anti-social. In one episode, the team actually visited a contractor and took a crap in the toilet bowl that was in the showroom. In another scene, someone urinated on a snowball and then tried licking it like ice cream. 

I am ending 2021 like a Financial Jackass. 

As I've just gotten my final paycheck, I was able to close the books in 2021. 

2021 cannot be a worse year for business as the release from lockdowns reduced demand for financial courses. It does not help that other areas of the economy are forcing more people into this field creating excess supply. I was mentally prepared to lose 50% of my revenue from 2020, but since I did not expect to have much use for my earnings in 2021, I decided to be a financial jackass for the year and see how much pain I can endure, so I did two things :

  • Maxed out the $15,300 into SRS and poured it into stocks very similar to what's taught in my programmes.
  • Recorded all my revenues and pumped 37% into CPF, making voluntary contributions across all accounts. 
Both moves are tax-deductible and I expect my tax bill to be really tiny in 2022.

The final result was extremely painful. Imagine compounding a bad year by taxing all revenues by 37% and then deducting $15,300 from what remains. I ended up digging into my dividends to make contributions a couple of times. Do note that I maintained my promise of farming a significant portion of my trainer fees into my student-built portfolio as well. 

But with great pain comes great wisdom. 

I wanted to do this in response to 15WW's suggestion that someone my age should do CPF voluntary contribution ahead of SRS. After a year of doing both, we can compare the results of both approaches. 

If you are 47 years old, a voluntary contribution provides 3.3% returns because it is a blended mix of CPF-OA, SA and MA contributions. On the other hand, my SRS was invested prior to the pandemic still returned an overall XIRR of 13.22% on a beta of 0.84. 

Overall, my feeling is that I would still prioritise SRS over the CPF voluntary contribution. 

While the risk is much higher, equity returns are more attractive if I can stretch to age 62. The only advantage to CPF is that I can actually my money much earlier at 55 instead of 62 for SRS. You should also not forget that you can make an emergency withdrawal from SRS, just pay a 5% penalty and withdrawals are taxed as personal income tax. 

There are, of course, some mild regrets in hindsight. All this money into CPF could have been put into a stable coin and staked at 12%. I doubt nothing could stop me from getting more substantively into the crypto game in 2022 and don't mind falling behind younger guys in making crypto profits.

Finally, kudos to other sole proprietors or business owners who can do both CPF VC and SRS at the same time, it feels like a huge struggle over the short term but your future self will thank you for it.

Likely my next Jackass stunt would probably be inspired by 1M65 Mr. Loo Cheng Chuan. 

Right now, I am still quite butthurt from all this CPF contribution in 2021, maybe I'll start in 2023.  


Sunday, November 14, 2021

Letter to Batch 23 of the Early Retirement Masterclass

 Dear Students of Batch 23,

It’s been a great honour and privilege to be able to conduct a 5-Day Early Retirement Workshop for you.

With 2021 coming to an end, we have concluded our final class of 2021. We’re ending the year on an aggressive note as the STI reaches 3,200. At the end of the tunnel, there is light as humanity begins to deploy a COVID-19 pill that can be a game-changer for office, aviation, and hospitality stocks.

Value investing may even become more profitable locally throughout 2022 for local stocks. One of the possible futures is that with the winding down of the Fed’s bond-buying, we may be seeing interest rates rise in 2022. Ending an era of low-interest rates may result in a sea-change of factors models that lead to outperformance. We have just witnessed the success of value investing factors in the local stock markets for the first time.

This class is also unusually savage with discarding stock suggestions. We’ve got an elegant 14 stock portfolio that is more concentrated than previous batches confirming that this class is quite discerning about what stocks they want in their portfolios. I have also decided to allow two banking stock picks the first time as we expect higher interest rates in the future.

Finally, I must say that while the class is quiet compared to previous batches, the quality of the questions asked in class was relatively high. One question that stumped me concerned whether having a margin account would affect the TDSR for getting home loans. Look to the Facebook group as I draft my opinions on what I think the answer is.

Lastly, I hope that Batch 23 will participate actively in the FB group.  In December 2021, we should be meeting up for an online webinar on integrating Early Retirement principles into Cryptocurrency investing.  

Hope to see you then!

Christopher Ng Wai Chung

Monday, November 08, 2021

TIme management and why the lives of digital nomads suck


When philosophers write books on personal development, what you get are excellent prose and very clear reasoning. What you do not get is a strong list of actionable items.

But I don't think that's the aim of Four Thousand Weeks by Oliver Burkeman. If I am to summarise the work, the idea is that since Singaporeans tend to live up to 85 years old, we have about 4,420 weeks to live so it's not a good idea to focus on productivity and try to fit everything into a to-do list. Instead, given the fact our time on Earth is short, we have to focus on living well and actively reject even some fairly useful uses of our time.  

As much as reading his books will probably not change my life, he's a deliciously subversive author who forces you to rethink common tropes in self-help. 

Remember the story about fitting stones, pebbles, sand and water into a jar made famous by Stephen Covey's book that's quoted to death by your pals? 

Burkeman's insight is that it's never about fitting everything into the jar. In life, there are too many large stones in the first place, so you need to decide which ones get into the jar. Productivity frameworks like GTD may not have the right answer for you. 

This book is a gem because it raises a good point about the FIRE movement and Burkeman is not such a big fan of digital nomads. 

The reasoning is quite novel. Most of these digital nomads have lives that we envy, which is why Tim Ferriss ideas have gained so much traction over the years, but according to Burkeman, even though digital nomads travel to many countries, they are actually quite lonely people.


Because time is a networked good. Digital nomads and FIRE folks spend many years ultimately getting control over their own lives, but time can only be valuable only if we are surrounded by folks who also have the same control over their time. The psychological research to back this idea up came from Sweden when they found that the sale of antidepressants drop only when everyone gets a long holiday together.

I think that this is a really good argument against the Retire Early leg of FIRE. 

No matter how financially free I can be, I can only travel when my kids are having a holiday. Even though I can afford to travel during school term, I can't find a travel buddy who is as financially free as me. Even if there is a person who is financially independent, we need common interests and hobbies to make good travelling companions.  Maybe a good gamer friend can have one major trip with me, but he may exhaust his assets while I can reset and fly again after a one month break.  

One way of solving this is for FIRE bloggers to have more meet-ups. More connections mean a higher probability of finding good travelling and eating cmpanions. I think that will happen as we slowly emerge from COVID-19. We need a larger group to scale our operations and promote our side hobbies, FIRE should be something like the Toastmaster's movement. But FIRE also attracts intensely introverted individuals.  

Alternatively, most of us should just lower the bar. After my law school experience, I prefer hanging out with younger folks because they have fresher ideas and are fairly crypto proficient. There's probably no need to travel too far and break our budgets. So I prefer to play small, organise hikes, have cheap meals. 

Maybe when there is a closed group of pals, we can travel to Malaysia together one day.

This blog will take a break as I am conducting a course beginning tomorrow. I will see you guys on the weekend !

Sunday, November 07, 2021

What can we do in case we become unemployable one day?

I read with dismay some of the stories in this CNA article on mature PMETS. As I have tried to work in the public and legal sectors before, the idea of being unwanted because of m age is not new to me.   

But the story on pseudonym Siva really takes the cake. 

This is a mechanical engineer who claims to have IT and project management qualifications and yet, does not know how to google the web on steps to become a private-hire driver. Is it fair to sympathise with the fact that he was unable to find a job for the last 7 years?

Sometimes, you really have to spare a thought for hirers as well, who's got the time to teach folks the basics like googling the web. Businesses are not charities.

I realise how scary the Siva's in Singapore are. I'm 47 years old this year, will I become a Siva in a decade? Will the older Millenials become a Siva in 20 years? 

If 50-somethings in Singapore lack the basic skills to be employable, some may actually join an SME and tar their hiring experience. Over time, HR professionals will join an alarm every time a 50-something candidate arrives. One day even a decent candidate will be turned down if the SME has had negative experiences before. I heard of at least one rumour that one large law firm has a policy of never hiring SMU JD graduates. These things happen.

Even I'm not getting any younger. If I become irrelevant one day, it may be due to the following reasons :

a) Quantum Computing - This is the largest paradigm shift that can make even a fresh grad today obsolete. 

Once computers no longer run on 1s and 0s and instead on qubits, the foundations of computer science becomes useless. Instead we have to pick up new ideas with Bloch Spheres and Hadamard Transforms, currently taught in local physics programs. 

Even the social sciences are betting transformed, In 2022, a book on Quantum economics will be published. 

I'm struggling to understand this now, but it's harder than anything I've ever done before. 

b) The Metaverse - We don't even know what this is

One day, young folks will just disappear from the Web. They may emerge in a VR world where they work, play and earn some universal currency backed by the FB central bank. I cannot even imagine what devices will be required to jack in into the Metaverse, but some crazy computer scientist will invent an in-metaverse computing platform so we have a platform within the space. 

I suspect by then, I will be too old to play this new game which is the Inception movie in real life.

The only silver lining out of this is that Gen X will enjoy watching Gen Y grow into their 40s and begin their mid-life crisis. My generation is still quite conscientious and enjoyed half of the property boom. It will be entertaining to see how avocado-eating work-life balance advocates with their version of a mid-life crisis where they get displaced by Gen Z. 

How to prepare for the day we become unemployable?

a) Invest aggressively

To resolve the issue, there is an age-old FIRE movement to be able to live on investments before obsolesces kick in. I expect younger guys to incorporate a large cryptocurrency component to their version of FIRE, which I am building, not for me, but for my kids.  Defi in particularly is very friendly to the FIRE movement. 

b) Entrepreneurship

Beyond financial investments, starting a business or dabbling in entrepreneurship may no longer be optional. The savvy employee may take a break from employment to try their hand on business with a full view that failure may see the back in employment. My bet is that running businesses may become a way to cope with mental health issues, where Gen Z will take a break to run a small business when their workplaces become too toxic. 

The idea is that one day, you can afford to employ yourself. 

Anyway, do read the CNA article. 

If anything, just don't become a Siva ok?


Thursday, November 04, 2021

A Holistic Approach towards Personal Development


I'm a little slow to the game as Atomic Habits by James Clear is already one of the biggest hits in the personal development space. The book looks really tiny and small in the premise - It is a powerful tool for you to design and emphasize good habits while diminishing and letting go of the bad ones. But upon closer inspection, it is really a book about engineering lasting personal change. It is well-researched and has set a new bar in self-improvement and hopefully, we can allow academics to replace the horrible gurus that plagued self-improvement over the past 20 years. 

This book had a really strange effect on me. After reviewing it, I realise that we've really been too micro when it comes to personal development. Self-improvement is way broader than that.

Interestingly, the mental model I propose is the Self Development Stack that is similar to TCP/IP or OSI stack we use today on the web. I think there are 7 layers to personal development each with its associated discipline and readings. 

Mastery of the entire stack may take a lifetime of personal cultivation.

So here's my model :

a) Identity

At the highest level is your identity. This is your personality and it may not be totally malleable. The best way to model your personality is the OCEAN personality model where each aspect of your personality has a biological analogue. Agreeable people have higher levels of oxycontin, openness to new experience has a larger amount of neural connections.

You learn more about your identity, you can use personality tests. The MBTI comes into mind but folks also use models like the Enneagram. Our current non-fiction lists is dominated by books based on the DISC personality model. 

b) Philosophy

This is the level where gurus like Tim Ferriss fits in. Personal Philosophy is the operating system of your mind. A Stoic who sees life as an endless series of challenges will have a different worldview of an Epicurean who wants to enjoy himself and immerse himself in different sensations.

Thankfully for the rest of the world, there is still no such thing as pop philosophy. Understanding his segment is hard because you may have to disentangle how you feel about truth (Epistemology), beauty (Aesthetics) or even the nature of god (Metaphysics). If you go far enough, this can even get you a PhD.

This will always be subordinate to your personality. No matter how attractive the Christian Gospel of Prosperity is, I will forever be disagreeable and will prefer to grow my own Tree of Prosperity.

c) Motivations

The following levels are your motivations which I have explored amply in my previous articles. By telling stories about yourself and discovering what makes you proud of your achievements, you will be able to define your core motivations in life. 

The skill you need to master this layer is the ability to craft narratives about yourself. What is your Hero's Journey? Joseph Campbell's writings will be useful in this regard.

For me, growing up in a retail environment saw my parents forever being subject to paying rent to their landlords in spite of being businessmen themselves. So control to me is always about rent-seeking.

I am forever bound to control the chaos in my life.

d) Goals

Below your motivations are your goals. At this stage, this is where you pull out your SMART framework to define the goals that will guide you in your daily life. Goals need to be Specific, Measurable, Achievable, Realistic and Time-Bound. 

Popular in the 90s, goals have come under attack as many folks fail in achieving their desired weight and net worth even after paying gurus thousands of dollars. 

Naval Ravikant has possible my favourite definition of that a goal is :

A goal is a contract you make with yourself to stay unhappy until the goal is reached. 

I still think that goals belong to the personal development stack.

e) Systems

If your goal is to attain financial freedom by age 40, a system is a method to turn your earnings into saving and convert your investments into passive income. Even after you meet your goal of becoming financially free, your system can keep running to make you even wealthier. 

Goals set the limits of your personal success but systems can limit how far you can fail.

The current trend is that systems trump goals because systems are designed to kick in subconsciously and kick in when an event occurs. Systems are like Windows Services that run in your operation system. 

At this stage, you need to consider the environment that will anchor your habits in the next step. Suppose you want to trade in cryptocurrencies, your challenges are to have a system to convert fiat to crypto, a system to stake and obtain APY from crypto, and finally a system to spend your crypto. 

Personally, I'm struggling to put a system in place to trade crypto. 

f) Habits

Systems consist of habits which are micro-programs and API function calls that allow the whole system to work.

Your system to convert savings into investments may contain a habit that automatically transfers $2,000 from your bank account to your Interactive Brokers account on your pay-day. Another habit is to buy an equity and bond UCITs ETF through successive limit orders at night. 

This is why you read Atomic Habits by James Clear.

g) Actions

Finally, habits are nothing but a series of actions, all designed to happen instinctively so that you can invest your mental energy into something else. 

This is the hardest part of personal development. Taking action.

Actions are not just bounded by your personal energy, they are bounded by the limited time you have on this earth. 

So there you have it, my Personal Development Stack that can act as a framework to slot all the self-improvement books you read and guide you for further action. I leave this to you for discussion in the forums, a more detailed write-up is scheduled for the Dr. Wealth blog.

Before I leave, I will show you how different the stack is for someone who emphasizes earnings versus someone who focuses savings: